SMEs that have made it locally and are ready to attain the next level of growth by venturing into the export market should avoid making costly mistakes that could potentially harm their businesses.
Bobby Madhav, Head of Trade and Collateralised Trade Finance at FNB Business says, businesses entering the export market for the first time often mistakenly assume that merely doing research and having a good concept and value proposition are enough to guarantee success.
"In spite of these important factors, without the relevant experience, guidance and partnerships, small businesses are bound to fall victim to costly export errors," says Madhav.
Ten common export mistakes that businesses should aim to avoid:
Not willing to learn from others - SMEs that consult experienced exporters, within their sectors, learn a great deal from their past failures and successes. This form of advice is usually free and can save a business time and money.
Abandoning core market - neglecting the core market can result in the business losing customers and market share. This can lead to complete failure, should the export business not do well.
Replicating products - because each market is unique, it is essential that products and services are tailored accordingly. Merely replicating a model does not guarantee success.
Not forming the right partnerships - it is not practical to try and understand all the local market dynamics through acquired research. SMEs should aim to form the right partnerships with suppliers and stakeholders on the ground to improve their chances of success.
Long-term commitment - venturing into an export market should be approached as long-term commitment for the business. Expecting success too soon will often result in disappointment.
Underestimating competition - SMEs should never underestimate competitors regardless of how good their offerings may be. Competitors do not want to lose market share and can quickly adjust their products and services, since they understand the market better.
Over extending the business - resources and energy should be invested in one market at a time. Once successful and the business is operating smoothly, only then can expansion to other markets be considered.
Trade finance mistakes - collaborating with a bank or financial services provider that can offer SME exporters unique solutions to … [Read more...]

With the South African Reserve Bank (SARB) having revised its economic growth outlook to 0.6% from 0.8% for the year, it is evident that the economy will continue to contract.
For SMEs, this means that doing business will be even harder as profit margins get squeezed and consumers start cutting back on spending.
"However, this may also be the perfect time for small businesses to expand their offerings to foreign markets, in order to grow, while diversifying and minimising the risks of a weakening domestic economy," says Bobby Madhav, Head of Trade and Collateralised Trade Finance at FNB Business.
Notwithstanding the challenges associated with exporting, there are many benefits for SMEs that can get this right.
Madhav says the common question that SMEs often ask is ‘when is the right time to start exporting?', the simple answer is now; considering that the entrepreneur has a solid business concept and management structure, consistently grows revenue and is ready to expand into new markets.
Furthermore, size should not be seen as a barrier. Any business, big or small, with the right product or service offering, can succeed in the export market.
Madhav explains why SMEs should consider entering the export market:
Incentives – the Department of Trade and Industry provides a number of incentives and assistance to businesses that want to start exporting. This is to encourage businesses to grow and further contribute to the economy.
Innovation - breaking into the export market is not as easy as it seems. Each country has its own risks, challenges, limitations and barriers. Therefore, SMEs cannot just replicate a model and expect to succeed. Products and services have to be tailored to suit the respective markets. This not only encourages entrepreneurs to reinvent themselves and innovate, but also helps to improve efficiency throughout the business.
Access to new markets - when SMEs have reached saturation in the local market and are no longer growing as expected, exporting can expose them to new and untapped markets, helping their businesses to generate a new revenue stream. Also, the power of the internet now enables SMEs that offer niche products to reach new customers all over the world.
Competitive edge – as the small business grows and gains more experience in dealing with foreign market risks and challenges, it matures and … [Read more...]